决定未来的国内市场

In the face of a growing trend by giant state-owned enterprises to expand abroad, China Chengtong Group has opted for a different path that keeps its focus at home and on fellow Chinese companies.

For a State Council-backed logistics giant, the group has kept its strategy straightforward.

President Hong Shuikun said: “ We are a Chinese logistics company, we’re in this market. We want to aim even sharper at the needs of Chinese firms. Our vision must also be just a little ahead of needs.”

With the mainland’s logistics demands on the fast track – the sector has grown at an annual average. rate of more than 20 per cent in the past five years – coupled with booming foreign trade, Cheng tong’s business model makes good sense. To date, the group’s volumes have been expanding yearly at 30 per cent in the past five years.

But major success could still be a distance away as the overall industry development is still in fancy and logistics to many firms is simply moving goods from one point to the other. The concept of comprehensive value-added logis tics services has yet to gain wide understanding and acceptance. Mr Hong said many mainland logistics players lacked an efficient corporate and operational frame work that yielded high utilisationand the government had yet to put in place a regulatory framework.

To secure sustainable develop and keep an edge, Mr Hong said Chengtong would specialise in serving the steel industry and handling logistics of super large equipment for industries such as the petrochemical, railway and highways sectors.

“[For the steel sector] we could be the ‘dragon head’. Steel extends to the lives of many people; it’s in-separable from our lives. China’s annual output has exceeded 300 million tonnes,” he explained.

“If we specialise and solidify our position in this sector, I believe the market will be expansive.”

By the same token, China’s economic growth is driving the demand for industrial equipment.

Mr Hong said the firm’s business principle was to participate from the beginning of the supply chain, when Chinese companies signed equipment. acquisition agreements with overseas or domestic vendors.

This puts the logistics operator in a better position as, for instance, the size of the equipment and special needs could be worked into drawing up a transport plan, if nothing else.

In a business sense, “anyone can engage in simple logistics. Butthe more stages of procedures we participate in the higher the value of the transactions”, he said.

The group has 15 million square metres of warehousing facilities, providing annual storage for 35 million tonnes of goods. It controls Shanghai-listed Zhongchu Development and Hong Kong-listed China Chengtong Development -Group.

Parent Chengtong Group is the reincarnation of the State Commodities Bureau, merging with 19 other offshoots and firms of various ministries in 1992 to become theoperator of the biggest number of warehouses in the country.

In 1992, the State-owned Assets Supervision and Administration Commission designated Cheng tong as one of the handful of pilot state-owned enterprises, along with Shenhua Energy and Baosteel, To date, Mr Hong said half of the directors were outsiders and the remaining staffers.

He said that today’s Chengtong, like all of its mainland peers, was the result of many of his official turned-company executive prede cessors’ failures and hard work.

“Just think, many of them were officials but took the plunge and entered the market,” he said. To day’s Chinese state enterprises chiefs took a long time to become what we are now.”

He said he was no exception being a former official from the State Commodities Bureau where he had worked since he graduatedfrom university in 1979.

Because of that, Mr Hong said the new generation must seize every opportunity and be precise on making the right business decision at the right time.

One should be confident of what is needed in the next few years. Over-early introduction of concepts doesn’t deliver a market, late introduction loses opportunity. Many of the advanced western technologies may not be applicable now to China.” What has taken off, Mr Hong said, was trade financing, which “combines commerce and logistics”.

Domestic manufacturers would leave their procurement contracts with Chengtong units, starting from the purchasing stage and going through to production to sales.Chengtong would guarantee the funding and repayment to banks.

Last year, the trade financing business reached eight billion yuan, up from 40 million yuan four years ago, and this year it is forecast to top 10 billion yuan.

So far, the group has tied up with Huaxia Bank, Agricultural Bank and China Construction Bank as “financial institutions are veryoptimistic” about this business.

This, he said, for now was China’s definition of value-added logistics.